Reloadable prepaid cards are issued as a Visa, or MasterCard. They’re primarily for folks with less than perfect credit, or suffering from being listed in ChexSystems, which prevents them from getting a checking account.
Reloadable prepaid cards will work just like a checking account. You’ll first have to deposit money, and then you can use your prepaid card to make purchases online, over the phone, and in person.
The big benefit is that unlike with a checking account, you can not overdraft your account and be slapped with astronomical fees with a reloadable Visa or MasterCard. As the popularity of these cards has soared, there’s been many new issuers that have entered the fold.
This is good news for you, because it means there’s much more competition. This directly translates into lower fees, and much better options to choose from. We’ve listed the five keys below to help you navigate and find the best reloadable debit card, for your specific needs.
1. Build credit
One of the most common questions we hear, is from folks interested in a prepaid debit card in hopes of building credit. In days past, you could use a prepaid card to build credit, but due to new regulations passed by our all-wise government, no longer.
This is because unlike with a traditional credit card, where you’re borrowing money on the promise to make repay. With a reloadable prepaid card, you first must deposit money, and only then can you use your card to make purchases. In other words, there’s no behavior that can be reported about you to build or damage your credit.
2. Monthly fees
You need to avoid high monthly fees, as of today, you can find a great prepaid debit card with very low monthly fees. One of which includes the Chase Liquid prepaid card that carries a flat monthly fee of $4.95.
Prior to all the new competition, you’d find monthly fees of anywhere from $9.95 all the way up to $19.95. Praise the sweet lord, that we live in a capitalist society and choices in the world of business brings many advantages to the consumer. One of the many benefits is lower prices.
3. Customer service
Shockingly, there’s some reloadable prepaid cards that will charge their customers a fee simply to speak with a live customer service representative. In addition to fees for being issued a monthly paper account statement, balance inquiries, and a multitude of many more services that require nickel and dime fees.
One of the best prepaid debit cards, the American Express Serve card, provides you with 24/7 customer service and for free. By the way, this customer service team is award-winning, and provides you with polite, respectful, and kind people to speak with, and for not just their prepaid cards but also for all their credit cards.
4. Load fees
This is the act of depositing money on your reloadable prepaid card. Many offers will provide you with free direct deposit for your account. There’s frequently additional options to deposit money, however many of these will carry small, but pesky fees.
For example, using a Green Dot MoneyPak to load cash will require you to pay a purchase fee of $4.95. This is a third party fee, and is relevant because you’re the one responsible for paying it.
As competition has increased, the fees generally speaking have decreased. Along with more convenient methods to deposit funds into your account. Please, do investigate this feature before you apply for a prepaid card.
5. ATM fees
ATM fees are the pocketbook killers for many reloadable prepaid cards. However, with choice comes freedom. One of the emerging trends in the industry is providing free ATM access. Often this will be for only ATM’s in a specific network.
For example, the Chase Liquid card gives you free access to all the 18,000 Chase ATM’s and 5,500 branch locations. Alternatively, the Amex Serve card provides you free access to the 24,000 MoneyPass ATM’s. Of course, there’s a fee should you use a different ATM machine, just like with your local bank.
As this industry experiences explosive growth, you’re the beneficiary and will have much more fee-friendly offers to choose from. It’s mission-critical to do your homework before you apply for any prepaid cards.
If you’re tired of suffering from a bad credit score, get a free credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596. And for more help and tips to get better credit with Dan Willis, sign up for our free newsletter and join our congregation.
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